Viasystems Group (VIAS)
Q1 2012 Earnings Call
May 09, 2012 11:00 am ET
Kelly Wetzler - Vice President of Corporate Development and Communications
David M. Sindelar - Chief Executive Officer, Director and Member of Executive Committee
Gerald G. Sax - Chief Financial Officer and Senior Vice President
Matthew Sheerin - Stifel, Nicolaus & Co., Inc., Research Division
David M. Wong - Wells Fargo Securities, LLC, Research Division
Jiwon Lee - Sidoti & Company, LLC
Franklin Jarman - Goldman Sachs Group Inc., Research Division
Previous Statements by VIAS
» Viasystems Group's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Viasystems Group's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Viasystems Group's CEO Discusses Q2 2011 Results - Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to the Viasystems Group First Quarter 2012 Conference Call. As a reminder, this conference is being recorded. I'd now like to introduce Kelly Wetzler.
Thank you, Tyrone. I'd like to welcome everyone to the Viasystems investor conference call for the first quarter of 2012. If you need a copy of today's earnings press release, you'll find it at viasystems.com. We have also prepared some slides, which you will find on our website. Our presenters today are Viasystems' Chief Executive Officer, Dave Sindelar; and our Chief Financial Officer, Jerry Sax.
In the course of our discussion, we are likely to make forward-looking statements. I wish to remind you that any forward-looking information we provide is given in reliance upon the Safe Harbor provision of the Securities Litigation Reform Act of 1995. The comments we will make today are management's best judgment based on information currently available. Our actual results could differ materially from any forward-looking statements that we might make. The company does not intend to update this information to reflect developments after today and disclaims any legal obligation to do so.
Please review today's press release and recent SEC filings for a more complete discussion of factors that could have an impact on the company's actual results. Some of our discussions today will include non-GAAP measures, in particular, adjusted EBITDA and adjusted earnings per share. These non-GAAP measures are reconciled with our GAAP results in today's press release and in our slide presentation.
Management believes these measures are useful for analytical purposes and to assist in comparing results over time and across companies. But I remind you that adjusted EBITDA and adjusted EPS exclude certain material items and are not a replacement for the reported results under Generally Accepted Accounting Principles.
I'll now turn the call over to our CEO, Dave Sindelar.
David M. Sindelar
Thanks, Kelly, and good morning, everyone and thanks for joining the call today. I apologize in advance, I've got a little bit of a spring cold, so if I cough, I -- it's -- I apologize. But anyway, I'll begin with referring to Slide 4 of the presentation. And I'm afraid that our solid start to 2011 may be overshadowed by the exciting news of our acquisition of DDi Corporation, the announcement -- and the announcement of a long-term capital structure to support the combined businesses. I'll come back to those topics later but I wanted to start talking about our first quarter.
Our consolidated first quarter sales were $262 million, they grew about 10% year-over-year while seasonally declining about 3% sequentially. Our PCB segment sales increased about 11% compared to the first quarter of 2011, and while our expected seasonal sequential trend was affected by the absence of the PCB premium pricing opportunities, we talked about in our last conference call.
Our assembly sales increased about 7% year-over-year and approximately 9% sequentially. First quarter bookings increased by about 5% compared to the fourth quarter of 2011, and resulted in a 1.08:1 book-to-bill ratio for the quarter. Looking forward to the second quarter for a moment, we expect to see seasonal sequential increases in both net sales for each one of the segments.
Compared to the first quarter last year, we achieved a 40 basis point improvement in our gross margins as a percent of net sales resulting in a gross margin of about 19.5%. This improvement resulted from selling price increases implemented in the mid-2011 period partially offset by the cost of labor and material compared to the same period a year ago. The decline in our margin sequentially resulted from a combination of the seasonal costs associated with the Chinese New Year holidays and the reduction in the premium priced opportunities.
Our adjusted EBITDA was $33.1 million for the quarter, or 12.6% of net sales. Our adjusted EPS was $0.32 per share for the quarter. Jerry will provide more color commentary on the adjusted EBITDA and adjusted EPS in his comments.
Turning to Slide 5, I wanted to make a few comments about our revenue performance for each market. Automotive continues to be the largest of our end markets representing about 40% of our first quarter net sales. Automotive sales increased 15% year-over-year compared to the first quarter last year. A 3% seasonal decline in automotive sales compared to the immediate preceding quarter was related primarily to the Chinese New Year holiday and the premium sales that we talked about in the fourth quarter. I&I remains our second largest end market at 24% of first quarter net sales. As a reminder, I&I is a catch all category that also includes wind and solar energy, medical, locomotion and other industries. It sustained a demand -- sustained demand from a broad-base of customers as end market compensated for slowing demand from a couple of our larger customers. The acquisition of DDi is expected to deepen our customer base in this end market.